Powerful Chart Formations

Chart 4.1illustrates a fine technique for projecting the time and length of a market swing, given the presence of a certain pattern of previous price movement. This pattern involves changes in the angle of stock market movement, an analysis of which can provide excellent projections of not only where the stock market is likely to go, but how long it will take to get there. Incidentally, the concepts involved are applicable to day trading as well as to short-term and even longer-term position investment.

Chart 4.1. Using Angle Changes to Project Price Targets

Sometimes the stock market appears to be rising or falling at a particular angle, and then the angle of movement changes. If you measure the distance encompassed by the first angle segment (A) and then project that distance along the second angle segment (B) in the direction that it is moving, you can frequently secure an accurate projection of the length of the B segment, which frequently is the same length as the first A segment.